ATLANTA – Research conducted by venture capitalist Kathryn Finney documented a 500% increase in funding raised by Black women founders, rising from $50 million in 2016 to $250 million in 2017. This dramatic surge followed the release of Finney’s groundbreaking ProjectDiane study, which quantified barriers facing underrepresented entrepreneurs for the first time.
What is ProjectDiane?
ProjectDiane is a biennial demographic study that tracks exactly how much venture capital funding Black and Latinx women entrepreneurs receive in the United States. JPMorgan Chase, the Kauffman Foundation, and the Case Foundation fund this research. Kathryn Finney created this study through her organization digitalundivided in 2013. Before ProjectDiane existed, no organization had systematically evaluated how many Black and Latinx women founded startups or measured their funding levels.
The study is named after Diane Nash, who organized the Nashville sit-ins and Freedom Rides during the 1960s civil rights movement. Nash developed strategic methods to break down racial segregation barriers.
Research Methodology
ProjectDiane researchers analyze data from 650+ Black and Latinx women-led startups and measured:
- Exact dollar amounts raised from venture capital firms
- Geographic locations of companies
- Educational backgrounds of founders
- Industry classifications
- Types of investors (angel, seed, Series A, etc.)
Specific Findings
The 2016 study found that Black women founders raised $36,000 on average, compared to $1.3 million for all tech startups. Black women received $289 million total out of $424.7 billion in venture funding from 2009-2017 (0.0006%). Only 12 Black women had raised over $1 million in venture capital in recorded history. After publication, Black women founders raised $250 million in 2017 versus $50 million in 2016 – exactly 500% growth.
Book Transforms Research Into Actionable Framework
Finney’s 2022 Wall Street Journal bestseller “Build the Damn Thing: How to Start a Successful Business If You’re Not a Rich White Guy” synthesizes lessons learned from this research impact. The book provides systematic strategies for entrepreneurs who lack traditional advantages such as family wealth, prestigious university connections, or established professional networks. Rather than offering generic advice, Finney applies her background as a Yale-trained epidemiologist to create hypothesis-driven approaches to business building.
Success Stories Mask Persistent Inequality
While the funding increase represents the largest documented improvement in venture capital access for Black women founders, deeper analysis reveals persistent challenges. The number of Black women who raised over $1 million grew from 12 to 34 companies between 2016 and 2018, representing 183% growth in the “$1 million club.” However, the median funding amount for Black women founders remained at $0, indicating that breakthrough success reached only a small percentage of entrepreneurs.
Scientific Method Applied to Entrepreneurship
Finney’s approach differs fundamentally from traditional business advice by treating entrepreneurship as a systematic process involving hypothesis formation, controlled testing, and iterative improvement. “Build the Damn Thing” outlines specific competencies including market research techniques, financial planning methods, and investor communication strategies. The book provides frameworks for evaluating business opportunities, developing minimum viable products, and scaling operations through measurable outcomes rather than inspirational narratives.
Personal Success Validates Systematic Approach
Finney’s personal experience demonstrates the strategies outlined in her book. She achieved one of the first seven-figure exits by a Black woman in technology when she sold The Budget Fashionista in 2014. The lifestyle media company grew from a personal blog founded in 2003 to a multimedia platform attracting over one million monthly visitors. This success occurred despite Finney lacking traditional technology industry connections or startup funding, validating her systematic approach to business development without conventional advantages.
Infrastructure Development Supports Ecosystem Growth
Following her exit, Finney established digitalundivided to systematically address barriers facing women of color in entrepreneurship. The organization launched the BIG Innovation Center in Atlanta, providing structured support for technology startups led by Black and Latina founders. This incubator program achieved recognition from the U.S. Small Business Administration and supported multiple cohorts of diverse entrepreneurs, creating replicable infrastructure for underrepresented founder development.
Data Drives Industry-Wide Investment Changes
The ProjectDiane findings influenced broader venture capital practices beyond individual entrepreneur success. Investment funds including Backstage Capital and Impact America used ProjectDiane data to structure new funding vehicles specifically targeting underrepresented founders. These developments contributed to the formation of over 25 micro-investment funds focused on supporting Black women entrepreneurs, demonstrating how systematic research can drive structural change in capital allocation.
Current Applications Through $20M Fund
Finney’s current work through Genius Guild, a $20 million venture fund, applies lessons from ProjectDiane research to direct investment activities. The fund targets Black entrepreneurs building scalable businesses that serve underrepresented communities while maintaining potential for global expansion. This approach demonstrates practical application of research findings to ongoing venture capital operations, creating a feedback loop between data collection and investment strategy.
Economic Impact Beyond Individual Success
The research impact extends beyond individual entrepreneur achievement to broader economic implications. Studies indicate that diverse founding teams generate 30% higher financial returns compared to homogeneous teams, suggesting that increased funding for underrepresented founders could produce significant economic benefits. The Citi Group estimated that racial inequalities in business lending cost the U.S. economy $13 trillion over the past 20 years, indicating massive untapped potential.
Educational Integration Shows Institutional Impact
Educational institutions have begun incorporating ProjectDiane findings into entrepreneurship curricula, recognizing the need to prepare diverse student populations for business leadership roles. Universities including Howard University have demonstrated success in producing Black women entrepreneurs, with graduates founding more technology startups than Harvard University graduates despite significantly different resource levels. This demonstrates how systematic support can overcome traditional advantage disparities.
Ongoing Measurement Reveals Continued Gaps
Current tracking indicates continued growth in funding for Black women founders, though significant gaps remain compared to overall venture capital distribution. The 2020 ProjectDiane update showed that Black women founders received $1.7 billion of $276.7 billion in total venture capital funding between 2018 and 2019, representing 0.64% of total investment. While this represents improvement from 0.0006% in the original study, it still falls far short of proportional representation.
Direct Support Through Micro-Investment
The ongoing impact continues through The Doonie Fund, which Finney established in 2020 to provide micro-investments to Black women entrepreneurs during the COVID-19 pandemic. This fund has supported over 3,000 businesses, demonstrating sustained commitment to translating research findings into direct economic support for underrepresented founders. The fund’s scale illustrates how individual action can complement systematic research to create measurable change.
Methodology note: ProjectDiane analyzed data from over 650 Black and Latinx women-led startups across the United States from 2016-2020, tracking funding amounts, geographic distribution, and educational backgrounds through comprehensive database analysis conducted by digitalundivided in partnership with JPMorgan Chase, the Kauffman Foundation, and the Case Foundation.
Key Takeaways
- ProjectDiane research documented 500% funding increase for Black women entrepreneurs from $50 million in 2016 to $250 million in 2017.
- Despite funding improvements, median investment for Black women founders remained $0, indicating persistent barriers for majority of entrepreneurs.
- Venture capital experts report that diverse founding teams generate 30% higher returns, suggesting significant economic potential remains untapped.
Related Articles
- Venture Capital Diversity Gap: Data Analysis Shows $13 Trillion Economic Impact – Comprehensive analysis of funding disparities and their measurable economic consequences across industries.
- Successful Entrepreneur Strategies for Underrepresented Founders: Evidence-Based Methods – Research-backed techniques for building businesses without traditional advantages or established networks.
- Systematic Barriers in Startup Funding: Data-Driven Solutions for Institutional Change – Quantitative analysis of structural obstacles and proven intervention strategies for increasing access.
